Elderly 'badly affected' by inflation

Thursday, February 18th 2010

Elderly people are likely to be badly affected by rising inflation, it has been claimed.

Head of pensions research for Hargreaves Lansdown Tom McPhail stated that pensioners could see the effects of this in terms of their spending power.

State pension income is linked to September's inflation rate, which was "very low", and now the overall inflation rate is higher.

Mr McPhail explained that this age group tends to have an inflation rate running ahead of the rest of the economy, due to the fact that a greater proportion of their income goes on necessities such as food and heating.

"There [is] the increase in healthcare costs and increasing demand for healthcare provision for long term care. I don't think these problems are going to go away," he added.

Many uncertainties exist and most people are not confident about the future, Mr McPhail claimed.

The Alliance Trust recently revealed that inflation rates saw a sharp rise in general, but 50-64-year-olds were seeing the highest rate of five per cent.

As a result, this age group faces an inflation rate that is 43 per cent above the official level.